Widgets are the new ad kid on the block

Forget static banners. Online ads are evolving into mini-applications with video, games, and dynamic content that people like enough to embed in their own Web pages and share with others.

These widget ads aren't commonplace yet, but they are cropping up more and more, further blurring the line between advertising and content. For some it will come as an improvement over flashing emoticons, dancing silhouettes, and expandable text boxes that cover up the item you want to read on a page.

Many people are already using desktop widgets, which are small applications that update dynamically and offer a limited function for things like calendar, clock, weather, and news or RSS feeds. Yahoo offers them, as do Microsoft and Google, who call them "gadgets."

Then there are the thousands of widgets on Facebook, things like Slide for photo slide shows and iLike for music recommendations, which have boosted the popularity of the social-networking site.

The interactivity and viral nature of widgets make them attractive to marketers looking for new ways to expand their audience. Brand advertisers are jumping on the widget ad bandwagon at a rapid clip.

"This is an effective way for marketers to share their brand with influencers out there...It has to be compelling enough for someone to want to grab it and place it onto their page."

--Peter Kim, president of Interpolls

This week, Ford will be launching a new online ad campaign using widgets that will run on AOL sites. The widgets advertise Sync, an in-car system that lets you speak commands to use a mobile phone and digital music device. Sync is powered by Microsoft.

The Sync widget ad lets you download a free song or view a number of short humorous videos, and offers more information about the product. You can also grab the widget and embed it into other sites.

"This is an effective way for marketers to share their brand with influencers out there," said Peter Kim, president of Interpolls, which is hosting the Sync widget ads, as well as tracking their performance even as they get passed on to blogs, RSS readers, social networks, and home pages across the Web. "It has to be compelling enough for someone to want to grab it and place it onto their page," he said.

If the Sync widget ad doesn't grab you, maybe the widget ad for the Warner Brothers film August Rush will. It's got photos, a trailer of the movie, and lets you find show times for theaters near you based on your zip code.

Then there's the Interpolls widget ad for dating site eHarmony that has rotating questions about dating. If your curiosity is piqued, you'll answer the question and a pop-up window will tell you the correct answer (45 marriages each day are "fostered" through eHarmony, according to the widget ad), while offering you a sign-up form for a free personality profile.

Other widget ads let you buy tickets and make other transactions and e-mail the ads around. "These widget ads can help qualify users for clients," Kim said.

Last week, PointRoll launched what it calls SnaggableAds, which are distributed over Clearspring Technologies' Widget Ad Network. These ads can be animated cartoons, videos, and games, such as one similar to Space Invaders.

Real-time feedback
Beyond the viral distribution aspect, marketers are attracted to the tracking and reporting that Interpolls and PointRoll can offer. Interpolls, for example, offers real-time data on how many times and in what way people have interacted with a particular widget ad. It also tracks how many times the ad has been grabbed and where it's been embedded--whether it was in a specific blog, Facebook or iGoogle. The ad companies also track all interactions within the widget ads that have been grabbed.

"We're tracking all the impressions of the ads that were served," said Kim. "Then we track every single response to the question or click to any of the features, as well as any interactions on subsequent panels."

Even Google has gotten in on the act, launching a beta of Google Gadget Ads three months ago. The ads are served on Google's content network, which reaches 800 million people, said Christian Oestlien, product manager of Google Gadget Ads.

Nissan has embedded Google Maps with live traffic feeds into its gadget ads, auction houses are pulling in live auction information for items relevant to particular Web sites, and a consumer packaged goods company has put a recipe search engine into one of its gadget ads.

And Honda Civic partnered with pop punk band Fall Out Boy and created gadget ads in which people could submit questions to the band and receive answers, Kim said.

The gadget ads allow marketers a "more emotional response than they are used to in their traditional campaigns," he said.

"In the future, this is probably going to be the model for all advertising across media, but we're still in the early stage of the evolution of these things," said Andrew Frank, a research director at Gartner. Down the road, we'll see mobile widgets, TV widgets, widget-enabled devices like Chumby, and widget ads in games and other interactive content, he predicted.

However, it's premature to say if the ads are all that much more effective than traditional banner ads, said Tim Hanlon, executive vice president at Denuo, the media futures arm of ad firm Publicis Group. "It is very early for this hyper-distribution scenario for content, let alone the advertising component of it," he said.

One thing is certain, there will be only more "widgetization" of content and ads, particularly when the distribution is so easy. "This lets advertisers bypass media properties and communicate directly with consumers," Hanlon said.